European Markets Close Higher

After opening on a weak note and struggling to hold gains after a fairly good recovery, European markets managed to close higher on Monday.

Sentiment turned a bit positive after the European Central Bank President Christine Lagarde said the bank will continue to support the economy by continuing with its accommodative monetary policy.

Concerns over the possibility of the Federal Reserve tapering its asset buying program and the recent remarks by officials that the Fed will hike interest rates by 2023 weighed on the markets and limited their gains.

Investors also continued to track updates about the spread of coronavirus infections in the U.K., and the progress in vaccination rollout across the globe.

The pan European Stoxx 600 climbed 0.7%. The U.K.’s FTSE 100 gained 0.64%, Germany’s DAX surged up 1% and France’s CAC 40 advanced 0.51%, while Switzerland’s SMI gained 0.46%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Iceland, Ireland, Netherlands, Norway, Portugal, Russia, Spain, Sweden and Turkey closed higher.

Greece drifted down, while Poland closed flat.

In the UK market, Ocado Group, Sainsbury (J), Evraz, ICP, Weir Group, Taylor Wimpey, Smith (DS), Ashtead Group, CRH, St. James Place, Anglo American Plc, Bunzl and Kingfisher gained 2 to 4%.

Shares of British supermarket chain Morrison Supermarkets zoomed nearly 35% after the company rebuffed a proposed £5.52 billion ($7.62 billion) takeover from private equity firm Clayton, Dubilier & Rice on the grounds that it “significantly undervalued the company and its potential.”

In France, Michelin, Air Liquide, ArcelorMittal, Renault, Saint Gobain, Technip, Kering, Publicis Groupe, Faureica, Hermes International and Carrefour gained 1 to 4%.

Atos, Danone, Sodexo, Accor, Valeo and AXA lost 1 to 2.3%.

In the German market, Volkswagen gained nearly 4%. Covestro, Daimler, Continental and BMW gained 2 to 3%.

Deutsche Post, BASF, HeidelbergCement, Vonovia, Deutsche Telekom, Linde and Adidas also closed with strong gains, while Lufthansa and Fresenius declined sharply.

In economic releases, British households’ optimism about their finances over the next twelve months reached its highest level in five years in the second quarter, survey results from IHS Markit showed.

The headline Scottish Widows household finance index, which measures households’ overall perceptions of financial wellbeing, rose to 44.7 in the second quarter from 42.0 in the first quarter.

The indicator signaled the weakest deterioration in U.K. household finances since the COVID-19 pandemic began.

On Friday, St. Louis Federal Reserve President Jim Bullard offered a fresh dose of hawkishness, saying he sees an initial interest rate increase happening in 2022.

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